February 2003 - A collision between law, insurance and life
 

Amidst the usual deluge of paper that crosses my desk, I recently came upon a story that highlighted the collision between law, insurance and life.  It concerned Lisa Palmer, who had received $16.5 million in damages in an action against the NSW Road Traffic Authority, Pioneer Road Services and the Evans Shire Council.
 
As you may be aware, this is now the largest personal injury award in Australian history.  No doubt in coming months, we will all receive case notes analysing the decision in great detail, as it will be of great interest to both lawyers and insurers for a number of reasons.
 
Any legal analysis though will necessarily gloss over the enormous financial and personal disaster behind the case.  Ms Palmer is paralysed from the mouth down.  She can barely make herself understood.  Her head is restrained in a halo brace.  She is unable to breathe independently and relies on a tracheotomy ventilator.  She has no control over her bladder or bowel movements.  She is undoubtedly catastrophically injured, and much of the award was for her future care.
 
Her claim was brought against three defendants, but both Pioneer and Evans Shire Council was insured by HIH.  The practical result may be that the NSW taxpayer, through the RTA, the other defendant may shoulder the entire judgement.
 
The story was run as a sidebar to an article on the call by Assistant Treasurer, Senator Helen Coonan for a national meeting to coordinate insurance industry reforms.  Of course, the Finance Minister, Senator Joe Hockey, has recently put the issue of a national [possibly] no-fault insurance scheme on the table.
 
A suggestion is also being floated that would see a government funded no-fault system introduced for catastrophic injuries.  Given the outcome of Ms Palmer's claim, is it any wonder that insurers might see this as an attractive option.  The cost of catastrophic claims is placing immense pressure on insurers, insured and taxpayers.
 
Only the most sanguine would believe there is no crisis within the insurance industry; a crisis in which the legal industry has also played a part.  Reform now appears inevitable and it is imperative that the industry, government and stakeholders work together to get it right.